The growth of the e-commerce industry has made it possible for just about anyone with a good business idea to start their own online company. However, launching a new business is always a financial risk. Although the upfront costs of an online business tend to be significantly lower than a traditional store, there is still a lengthy list of initial investments that need to be made before an e-commerce business can open its virtual doors. In fact, one report estimated that the average e-commerce company costs between $17,500 to $37,500 to launch.

This initial investment can quickly eat into your earnings, which means it can take years before you start to see a profit. But, if you can start off on the right foot by saving yourself as much money as possible during the launching phase, you can create a more profitable online store from the beginning.

Let’s discuss.

1. Start with Low or No Investment Ideas

One of the greatest upfront charges that you will be faced with as an online entrepreneur is ordering your first round of inventory and finding a place to store these products. This will often require inventory rental space and other equipment that is needed for inventory management. These upfront costs can add up quickly, especially if your first round of sales take a bit before they start trickling in.

Instead, you may want to consider some other business ideas that require little to no inventory, and therefore, are a smaller initial investment. Digital products are a great option to get your funds going because they require absolutely no physical inventory, storage, or shipments. Another option is to create online courses, such as lesson plans to teach skills like using a software program, learning a new language, or a weight-loss fitness course.

Since the competition for digital products is pretty high, the key here is to find a niche market that you can customize an online product specifically to. For example, say that you want to start an online course that is focused on DIY crafts.

There are tons of courses for various crafting skills, such as sewing lessons, scrapbooking guides, and other creative home projects. In order to find a niche you can market to, it is helpful to utilize tools like Google Trends. Take a look and see what keyword searches are related to your area of focus and identify niches that are steadily growing. In the DIY sector, searches and interest in macramé home décor are on the upswing. This could signal a great audience to target with online beginner courses on creating this type of home decoration.


Macrame Wall Hanging Class

By choosing to go with a product that exists solely online, you can eliminate some of the biggest upfront costs that most e-commerce companies are faced with. This can help to give your company the legs up it needs to start earning profits to fund other projects later on.

2. Take a Look at Drop Shipping

Entrepreneurs tend to have mixed feelings towards drop shipping, and the approach is certainly not without its risks. There are plenty of third-party fulfillment companies that use rather unsavory practices to keep their own profits high. Unfortunately, any issues that a customer has with their product will be directed at your company, not the drop shipper.

However, dropshipping can help to make your online business considerably more profitable from the start. According to one report, e-commerce sellers specifically can earn up to 50% more on their sales by partnering with a drop shipper for order fulfillment.

This is exactly what online entrepreneur Justin Wong did that famously helped him launch an online store – earning him $12,000 in a single month!

Rather than pitching his product idea to drop shippers, he browsed their selection until he found items that he wanted to sell. In his case, he sold women’s t-shirts and hoodies with unique graphic designs. He created the designs himself and worked with his dropshipper to print them on clothing products they already offered. This meant that Jason could sell his clothing at a premium cost while the dropshipper fulfilled orders, leaving him with the profit margins.

So aesthetic

The key here is to design your business around a product that a drop shipper is already able to supply. This will make it far easier for you to control the quality and design of the product. Moreover, it assures that your third-party logistics partner can fulfill your orders.

3. Make the Most of Free and Cheap Marketing

Marketing is going to be another major upfront cost necessary to launch a successful online business. It’s an uphill battle to get your name known in the e-commerce market – since competition is so high. Therefore, you will need to stretch your budget as far as you can.

One way to do so is by utilizing free and low-cost marketing methods, particularly through social media. In fact, 75% of online consumers have purchased something because they saw it on social media.

In order to kickstart brand recognition and reach larger audiences, many businesses turn to influencers to promote their products after a launch. However, since influencer marketing is so prevalent these days, it is becoming an expensive form of advertising.

Big name accounts with thousands of followers charge hundreds to thousands of dollars per post. Instead, a better option for brands with tiny marketing budgets is to look for micro-influencers. These figures can actually help your business grow in a major way. Often times, the smaller influencer accounts have higher engagement percentages and they also reach more targeted audiences, something that is perfect for getting your niche ecommerce business in front of more interested eyes.

The online beauty brand Frank & Whit did a great job of this by partnering with niche micro-influencers to attract various audience segments. Since their products were all natural and cruelty-free, they partnered with vegan micro-influencers as well as beauty bloggers, skin care accounts, and micro-influencers that advocated for green and clean products to promote their brand.

Micro-influencer 1micro-influencer 2


Starting an online business should be an exciting time in your dreams of entrepreneurship – not a time of worrying about finances and stressing. While financial responsibility is certainly necessary for businesses of all shapes and sizes, there are certainly some smart ways to keep your upfront costs low to grow profits. By keeping these tips in mind, you can set your online store up for success from the very start.

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